WARC: Audio Gets 31% Of Media Consumption But Just 9% of Ad Spend.


Radio broadcasters have complained for years that their medium is vastly under-utilized by advertisers and its share of ad dollars is grossly out of synch with its share of time spent with media. New research from WARC backs that up, revealing a massive rift between audio’s share of media consumption and its share of ad spend. According to the media and advertising research firm, audio captures 31% of media consumption but just 9% of ad send.

The objective of the WARC study was to determine if there's a disjoint between consumer consumption and media allocation of audio as a channel. The results were presented at AudioCon, an online conference presented Friday by iHeartMedia tied to its iHeartRadio Music Festival in Las Vegas.


The new study reinforces the dramatic decline in linear TV consumption, which fell from three hours, 35 minutes per day in 2012 to two hours, 15 minutes in 2021. That caused linear TV’s share of consumption to tumble from 32% in 2012 to just under 24% by 2021.


Audio, meanwhile, is bucking this trend. The combination of podcasts and other digital audio formats with the availability of AM/FM content through new digital distribution points caused audio’s share of media consumption to increase to 31.0% in 2021, WARC’s research shows. “However, the growth in audio consumption has not as yet been connected to a comparable growth in spend by advertisers and their partners on audio channels,” said Paul Coxhill, Managing Director at WARC & Lions Intelligence. With only 8.8% of ad spend, audio spend would need to at least triple to be on a par with its share of consumption.


Coxhill called this “a clear gap” between how consumers are behaving and where advertisers are investing. “The size of the investment gap could represent a meaningful opportunity for brands,” he told the AudioCon crowd. “If advertisers want to align their budget to where their audience spends their time, audio’s role in the mix becomes more important. Of course, given the relatively low spend relative to consumption, there's also less competition for consumer attention.”


Reach Being Left On The Table


When brands invest a disproportionately higher share of their budget in online display, linear TV and online video, relative to their share of consumption, they “have to fight much harder for that audience's attention,” Coxhill explained. And the ad industry’s underinvestment in audio “means that some reach is being left on the table [and] some brands are not maximizing the potential to reach their audience and gain their attention,” Coxhill argued.


While WARC’s research found underinvestment in audio to be true across all demographics, the gap between consumption and ad spend was particularly pronounced among men, younger people in general (16-34 year-olds in particular) along with Black and Hispanic audiences, and people with higher incomes.


Four Attitudes Toward Audio


WARC’s annual global survey of 1,000 marketing executives identified four different groups:


Audio Avoiders – The 25% of advertisers who don't invest in audio at all


Digital Onlies – Those that jumped straight into new formats like podcasts WARC's survey of advertisers shows 38% of this group intends to spend more this year. But by not exploring the full extent of audio, Coxhill noted this group of advertisers is “missing the largest pool of consumers and the power of context.”


Broadcast Believers – Advertisers that have seen the benefits of radio for years and are now starting to think about pushing deeper into other forms.


Cross Platform Champions – Marketers that are all in on audio, exploring its full potential and “testing their way to marketing effectiveness.”


In summary, Coxhill pointed to a missed opportunity for marketers. “Bridging the investment gap seems like a viable way for brands to increase their visibility and their reach,” he said.


Greg Ashlock, CEO of iHeart’s Multiplatform Group, put it a bit more bluntly. “Whether it's efficiency, or reach and scale, return on investment, or the benefits of greater share of voice, it’s time to follow consumer behavior,” he said after Coxhill’s presentation. “And it's time for advertisers to spend their budgets, the way their clients and their customers are spending their time”


The WARC findings reverberated throughout the roughly 80-minute AudioCon conference.Jacki Kelley, Dentsu’s CEO for the Americas, compared it to her experience working at Yahoo years ago when the amount of media investment in digital was disproportionately lower than for TV, relative to the amount of consumption.“Think how long it took for it to catch up,” Kelley said. “So patience is a virtue. I do think because we've been here, this will happen much quicker.”

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